@unpublished{20.500.12766/382,
year = {2019},
url = {http://hdl.handle.net/20.500.12766/382},
abstract = {After the financial crisis of 2007, in most economies carrying out either fiscal consolidations or counter-cyclical fiscal policies, public and private debt have moved in opposite directions, as opposed to pre-2007 evidence. Private deleverage and public debt build-up may affect the recovery path of countries after a recession. In a new Keynesian model with financial frictions, we show that when the economy is hit by a credit risk shock, the negative correlation that arises between public and private debt amplifies the response of GDP. In our setup, the traditional monetary-fiscal policy mix is not enough to offset this public-private debt mechanism and therefore bring back economic stability. When macroprudential policy is part of the policy mix, the public-private debt channel can be broken. Interestingly, depending on the macroprudential instrument, a trade-off may arise between private debt and output stabilization.},
publisher = {SSRN},
title = {Financial Frictions and Stabilization Policies},
doi = {10.2139/ssrn.3388131},
keywords = {Financial accelerator},
keywords = {Acroprudential policy},
keywords = {Fiscal and monetary policy mix},
keywords = {Public and private debt},
author = {Malmierca Ordoqui, María},
}